As part of its remit, and to reduce the amount levy payers have to fork out, the FSCS “seeks to recover amounts paid in compensation from any party that it considers has a legal responsibility”.
Where a firm has to pay compensation, the legal rights of its customers are transferred to FSCS.
The FSCS then “stands in the shoes” of its customers in pursuing any recovery action.
Mark Neale, chief executive of the FSCS, said: “Recoveries are an unsung part of FSCS’s vital work of compensating customers and contributing to confidence in financial services.
“I am very proud of the professionalism of our recoveries team in navigating complex cases to successful outcomes.
“Recoveries will play an essential role in our strategy for the 2020s.”
Also, the FSCS said it is currently pursuing recoveries against failed property investment company Harlequin.
The Harlequin group is a collection of companies that was involved in the marketing, sales and development of overseas investment properties connected through the common ownership of David Ames and/or his family members.
Investors purchased various off-plan property development investments with Harlequin, primarily in Caribbean resorts, through UK-based IFAs and Sipp providers (and sometimes directly).
But the developments failed, and investors’ funds were not used to develop the overseas resorts.
Approximately 6,000 people invested a total of £400m in the projects, and in some cases the same property was sold to multiple investors.
So far, it has compensated more than 2,700 investors, who collectively invested more than £125m in the business.
In addition, the FSCS said it has recovered billions of pounds following the resolutions of the 2008 banking failures, where the lifeboat scheme needed to take out loans totalling approximately £20bn from the UK government at the time of the financial crisis.
The loans have now been repaid in full, mostly through the FSCS’s recoveries work.
James Darbyshire, the FSCS’s general counsel, said: “The usual avenues of recovery we pursue include actions against the firms we’ve declared in default, and their professional indemnity insurers.
“Increasingly, however, we are taking ever more complex recoveries action, and in those instances, we tend to make use of our panel of law firms, who have both the expertise and jurisdictional reach to assist us.”